Telstra, Optus go live with 700MHz networks

Benefits from this month’s switch-on of 700MHz mobile networks could seem subtle to the average phone user, but will be important to enhancing coverage and data transmission going forward, according to telecom analysts.

On 1 January, Telstra and Optus received the go-ahead from the Australian Communications and Media Authority (ACMA) to turn on all of the 700MHz spectrum they purchased in the April 2013 Digital Dividend auction.

Althought the telcos were not allowed to fully switch on their 700MHz networks until 1 January — allowing broadcasters time to move off of the spectrum — Telstra and Optus started rolling out the spectrum in selected pilot areas last year after receiving early access commercial licences from the ACMA.

The so-called beachfront spectrum is valuable for its ability to travel longer geographic distances than higher frequency spectrum — making it ideal for regional areas — and for its ability to travel through walls — providing better indoor coverage.

Vodafone did not participate in the auction for the 700MHz spectrum, but maintains strong low-frequency holdings in the 850MHz band.

“The benefit of 700MHz LTE for mobile users is the extra transmission 'punch' achieved at these lower frequencies,” said Geoff Johnson, a telecom analyst and managing director of Analyst Extension.

“Mobile phone users will barely notice the difference but astute observers may be able to notice that call coverage, signal strength, drop outs and voice and aural quality with 700MHz is better than they may have experienced in the past.”

Users will need a very recent device to truly appreciate the new 700MHz networks, according to independent telecom analyst Chris Coughlan.

“For users, only those with the latest devices will actually benefit directly from the [Asia Pacific Telecommunity (APT)] 700MHz LTE being turned on now,” he said.

For example, in the iPhone range, only the iPhone 6 supports the APT version of 700MHz. Some previous iPhones supported 700MHz in North America only.

Users with compatible devices can expect to see better coverage and faster speeds from the Telstra and Optus networks, Coughlan said.

“Those carriers will also be able to aggregate bands, [for example] 700MHz and 1800MHz, to provide greater capacity and speed to devices that also support this feature.”

Users with devices that don't 700MHz could still see indirect benefits from telcos switching on the new networks, because when new devices move to 700MHz it will free capacity on existing bands, the analyst said.

Without 700MHz, Telstra and Optus could not cost effectively deploy faster 4G networks based on LTE-Advanced (LTE-A) in rural and regional areas, he said.

“It would take up to five times the base station site numbers to provide equivalent coverage of 700MHz LTE with 1800MHz. For a carrier like Telstra, they will be able to provide similar LTE coverage as their NextG 850MHz 3G network by upgrading their existing sites.”

The 700MHz network is good news for businesses in regional areas, added Coughlan.

“700MHz LTE-A will also facilitate cost effective implementation of the [Internet of Things] outside the metropolitan areas, improving the productivity and cost effectiveness of agricultural, mining and utility industries,” he said.

In the Digital Dividend auction, Telstra paid $1.3 billion for a 2x20MHz chunk of the nationwide 700MHz spectrum and 2x40MHz in the less expensive 2.5GHZ band. Optus paid $649 million for 2x10MHz of the 700MHz spectrum and 2x20MHz in the 2.5GHz band.

Timed with the launch of 700MHz, Telstra and Optus on 1 January announced expansions to their respective 4G networks.

Telstra said it switched on its LTE-A network, dubbed ‘4GX’, on the 700MHz network in 600 more towns and suburbs. The new areas include many neighbourhoods in all the capital cities as well as many other cities and large towns throughout Australia.

Separately, Optus said 4G 700MHz coverage went live last week on 270 mobile sites across capital cities and regional centres. During January, Optus plans to switch on service on more than 1500 sites in metropolitan and regional locations, the telco said.

There is still the lingering matter of what to do with the 2x15MHz of 700MHz spectrum that went unsold in the Digital Dividend auction. Last year, Communications Minister Malcolm Turnbull asked the Australian Communications and Media Authority (ACMA) to investigate options and submit its findings.

In an interview last month, Australian Mobile Telecommunications Association (AMTA) chairman Matthew Lobb said that process is ongoing and further discussion on this issue is expected in 2015.

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